Pea Contract

[Teejay]

I took out a contract to grow peas last June, unfortunatly I have been told that the particular variety is not available and that the contract is void. I have been offered a different variety at nearly half the price of the original contract. Where do I stand etc.

 

[crazy_bull]

Naughty if they have only just told you, a lot of firms went flat out selling seed they had no hope in getting due to poor yields on some varieties this year, I am assuming you are talking about a marrowfat contract? I am not sure 100% how you stand but am aware that many people were let down last summer, often chasing after the last penny to contract with someone else, only to find they ultimately couldn't supply the seed and therefore had no contract.

I will try and find out how you stand but suspect that as it was likely a 'buy back' contract that it is indeed void without the seed, I guess the contract they are now offering is for a large blue pea or similar?

C B

 

[Barry]

I agree it is a difficult one, if it is a Marrowfat contract then I know seed is short and the end users will only take certain varieties. As is usual with these things I would negotiate. Take the contact they offer and then see what they will do for you either on your next seed order or next year's marrowfat contract.

With the marrowfat contracts they don't offer them without the seed going with it and you can't buy the seed in the trade.

So talk to them and try to strike a deal on something else as compensation.


Barry

 

[franklin]

So, what contract do you have? A contract to buy seed of variety x, and sell the produce for y?

While it sounds like it's a case of tough tits, fact is that, for no fault of your own, you are down on paper a wodge of cash. We don't know if you were contracted for five or five hundred acres. If the later, that's a lot of dosh and I would be bringing this to the attention of some kind of experts on contracts.

You know the adverts "lost money and not your fault"? That's you. Well worth the effort to find how many tons of seed were grown, who got some, and if others got their seed and not you. Not that I am a sceptic but who is to say they have supplied seed to non contract growers and have hence run short to supply those who's contracts now look real good?

 

[Against_the_grain]

Yep I wouldn't let this one go either. Would they let you off if you cancelled a contact on them?

 

[Honest john]

Friend had the same with spud seed last year.

Ordered early at good price.
Prices went up and guess what ?

 

[Barry]

There may be a clause in your buy-back contract terms that state that the buy-back is dependent upon them being able to supply the seed, so read through that.

Having looked at one from a company I deal with it states that 'it is a condition of the contract that seed is supplied' not that well worded but the implication is no seed - no contract.

From the other side of the fence I must point out that we get cancellations of buy-back contracts where the grower has just decided he doesn't want to grow that crop. And the produce of it may well have been part of a tonnage that the merchant has sold on. In this instance it is the merchant that has lost profit.

 

[Grain Buyer]

Yep I wouldn't let this one go either. Would they let you off if you cancelled a contact on them?

if the contract doesn't have a fixed price, then yes. circumstances change all the time, such as weather conditions. I've worked for 3 big merchants in my time and non of them would have an issue with cancelling an un-priced, undrilled contract. Think you might need Judge Rinder to establish what it's cost you. It would be interesting to note what you class as costs, and whether these costs would be recouped. Personally all I can see is a big inconvenience which can still be rectified.

 

[Teejay]

Yes it is a marrowfat contract and yes they have left it to the last minute to tell me. What really annoys me is that I had the choice of contracts last summer and also I could have bought marrowfat seed before christmas from a different supplier. I think that I will need to speak to the NFU legal dept today.

 

[Grain Buyer]

Teejay, what are the costs to you? As others have said, unless you have something you can highlight in your contract which now proves a financial loss, you will struggle. I can only see any favour you may get being nothing but a good will gesture to hold your custom. The merchant may decide to let you go, in which case no one has achieved anything.

 

[warksfarmer]

Just another example of the diabolical seed contract industry in this country. It really needs sorting out because its always the farmer that takes all the risk for little reward then gets shafted at the first opportunity.

We need to see a shared risk/reward system in place for the farmer and seed company where by they work 'properly' together to produce the crop from start to finish. The seed should be supplied Foc by the seed company and the farmer provides the inputs within reason up to an agreed amount. Any extra input paid for collectively and then the final selling price split in the favour of the farmer because he's the one thats put his land into the deal to give it a go.

 

[Grain Buyer]

I am often flabbergasted buy the small prems paid to seed growers, the C1 seed alone would have me coughing! Perhaps a seed grower on here could highlight the benefits.

 

[warksfarmer]

I am often flabbergasted buy the small prems paid to seed growers, the C1 seed alone would have me coughing! Perhaps a seed grower on here could highlight the benefits.

We refuse to grow seed here now as that is one of the reasons. My grandfather started growing seed in the 1960's. Today we won't even entertain it as its just a one way con.

There is only one way for a farm to do it and that become a seed farm so they are suppling the end user and cut the merchants out. There is a very good one in central england that does just that across about 600 acres I believe.

 

[average farmer]

Just another example of the diabolical seed contract industry in this country. It really needs sorting out because its always the farmer that takes all the risk for little reward then gets shafted at the first opportunity.

We need to see a shared risk/reward system in place for the farmer and seed company where by they work 'properly' together to produce the crop from start to finish. The seed should be supplied Foc by the seed company and the farmer provides the inputs within reason up to an agreed amount. Any extra input paid for collectively and then the final selling price split in the favour of the farmer because he's the one thats put his land into the deal to give it a go.

I would be happy with the seed being provided FOC or knocked off the check I get after peas are collected.

 

[Teejay]

The costs to me are that I am now expected to grow and sell my peas at £140/tonne less than my original contract. There may also be issues with EFA/ area payments if I dont grow peas.

 

[farming4profit]

I am often flabbergasted buy the small prems paid to seed growers, the C1 seed alone would have me coughing! Perhaps a seed grower on here could highlight the benefits.

Two points - first Teejay says its a marrowfat contract - so not 'seed'.
Secondly - the trade would pay higher premiums for C2 if they could get more value out of the certified price of bagged seed on farm. The two are related. There will always be the one variety that carries a premium e.g. Skyfall last year, but the 'run of the mill' varieties compete for trade on farm and retail price gets shredded. Now admittedly that is partly the retailers fault, because farmers are better at buying seed than retailers are at 'selling' (IMO) and also due to over-supply. Over production is the bain of the seed market. Merchants are vying for business on farm and new varieties are released by the breeders in a bid to maximise market share and thus royalty income with little regard for what that supply tonnage will do to the price at the farm gate - great for the farmer buying the seed, but no good for the merchants trying to sell at a price where they can make a decent margin AND pay their seed growers a decent wedge for the effort. So Lee is absolutely right, the seed growers who concentrate their whole farm to seed production, have efficient on floor storage and drying, keep variety numbers low and handle the product as little as possible will achieve the best seed premium / margin at lowest risk.
I would love seed premiums to the grower to rise, but to make that happen there has to be a 'pull' from the farm-gate price, and that will only happen if farmers see a genuine value in the product they are purchasing compared to FSS. and that will only come from a) shortage in the market or b) a new variety that is a genuine improvement on predecessors.
So yes, seed premiums are generally lower than I would like but market forces are dictating on the whole (I'm talking winter wheat here). There are seed contracts on offer however which buck that trend and not half an hour ago I was asked to find spring barley land for a breeder (Single or double break) where I suspect premium on offer will be above average. I also have a buy back pea contract (commercial-not seed) and may have the need to find spring bean seed production.
Thirdly - C1 seed price? - not as excessive as you may think. Again every deal is different. To generalise is dangerous.
Reasons to grow seed - the market has its place. By example growers in some counties are a long way from ports and dont want to deal with millers, so seed offers a premium. Others may wish to stay with only a couple of varieties but spread their risk by growing for a commercial market and a seed market (cuts down cleaning costs too). Some growers like the idea of seeing their produce being sold into the seed market, take pride in the quality and purity they produce and like to be at the forefront of the market growing pre-recommended list varieties.
The seed job is not of interest to everyone and many 'set-ups' are not suited to the needs of the industry, but I believe there are opportunities out there. Of course seed production requires seasonal production contracts the premium at the time of agreement can seem attractive, but by the time the crop moves global price pressures may have intervened and the premium may seem less worthy. Milling premiums have sky-rocketed by example - enjoy it while it lasts; how long before they will be less than £20? By comparison I have a spring barley contract on my books sitting at a fixed price of £180/t.

 

[Grain Buyer]

Teejay, that was my point, if you can demonstrate an actual cost, then you have a case, go for it. Farming for profit- I simply questioned the benefits of growing seed, even asked a seed grower to enlighten me. You seem to have highlighted some good reasons so thanks for that. Personally can't see how it fits most farmers, but good luck to the ones who do.

 

[willy]

The costs to me are that I am now expected to grow and sell my peas at £140/tonne less than my original contract. There may also be issues with EFA/ area payments if I dont grow peas.

What variety were they?

 

[Teejay]

I have never been given a named variety just a marrowfat type.

 

[Honest john]

The costs to me are that I am now expected to grow and sell my peas at £140/tonne less than my original contract. There may also be issues with EFA/ area payments if I dont grow peas.

It not that straight forward.
Blue peas ! that you can get seed & a contract for, yield a fair bit more than Marrowfats.
So in GM there is not much in it.